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Lean times for Fatso's: Owner of Loveland diner struggles to reopen after March fire

By Craig Young Reporter-Herald Staff Writer

Posted:
07/02/2013 05:47:31 PM MDT

LOVELAND -- The owner of a Loveland restaurant damaged by fire almost four months ago says he's not sure his business can recover.

A fire in the basement of Fatso's Diner on March 17 closed the drive-in at 1606 W. Eisenhower Blvd. Shortly after, Matt Nelson and his wife, Julie Johnson, said they hoped to have their diner open in three months.

They have passed that milestone without even starting on repairs.

For almost three months, they struggled with their insurance company without receiving their first payment.

Their frustration at seeing the summer season slipping away led them to post on their marquee: "Farmers Ins Won't Pay."

Last month, at the request of Farmers Insurance, Nelson took down the sign and received a check for $56,179 to cover repairs, plus another $5,000 for lost income and $35,646 for personal property that was stored in the basement.

But that wasn't nearly enough to cover the repairs, Nelson said at the time.

Since then, Farmers has sent more checks totaling about $130,000 for repairs, he said.

Matt Nelson, owner of Fatso's Diner, talks recently about all the troubles he has had trying to re-open his restaurant after a fire there last March. He used the business marquee to outline his frustration with his insurance company.
(
Jenny Sparks
)

A construction estimator hasn't finished putting together his report, but Nelson said he's heard it will cost more than $300,000 to get the restaurant open again.

"They said everything in the building is a total loss," Nelson said.

Insurance Investigation

Mark Toohey, a spokesman for Los Angeles-based Farmers, said the insurance company had to complete its investigation before paying anything on the Fatso's claim.

"It's not unusual after a claim is filed that we would ask for information," he said.

The fire department investigation, completed a few days after the fire, ruled it accidental, caused by a cigarette in the basement.

When asked if a three-month wait is out of the norm, he said, "I don't know if there's a litmus test for how long it takes to settle these claims.

"We get through these things as quickly as we can," Toohey said.

Nelson said he's glad Farmers has been responding with more money.

"It seems like they're trying to make things right, but they should have done it a long time ago," he said.

Adella Chavez, co-owner of Adelita's Mexican restaurant in downtown Loveland, said she can relate.

A fire in the back of her restaurant Dec. 1, 2008, forced her to close for almost five months.

"My insurance took about a month to get it together," she said, and the renovation work didn't start until February.

"I would never do this again. Never, ever," Chavez said. "I had nobody to talk to. It was awful."

Chavez said she would be happy to share what she learned with Nelson and Johnson. "They've just got to be patient," she said.

"I appreciate all the support people gave me," she added.

Lost Summer

Nelson said he, too, has been hearing from both customers and strangers who offer their support.

And he knows people miss Fatso's. When he's at the restaurant, he often sees people drive up to the intercom boxes and start pushing the buttons to place their orders, unaware that nobody's inside.

For Nelson and Johnson, every delay is costly.

"It takes me all summer to make it through the winter," he said, and with a three-month construction estimate, summer already is gone. "If I do reopen, I'm going to struggle to get through the winter."

He's worried about his workers, too. Without the expected insurance payments to cover their lost wages, some of them have been forced to move out of their homes because they can't pay the rent, he said.

Nelson suspects he's approaching the point at which it would make more sense to knock down the 40-year-old former A&W building that he has been leasing since August 2009.

"I've been working with the owner every step of the way," he said. "No matter what, I want to do right by the owner.

"It costs so much to open a restaurant," Nelson said. "Unless they pay out fully, it would be impossible to do that.

"No matter what happens, I'm going to do something with that property," he said. "I don't care if I have to park a food truck there and pay the rent."

Matt Nelson, owner of Fatso's Diner, points to a ketchup bottle in the dining room of his restaurant as he talks about how everything in the place suffered smoke damage in the March 17 fire.
(
Jenny Sparks
)

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